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A weak September jobs report is likely to keep the Federal Reserve on hold later this month, with the focus remaining squarely on bringing inflation down.
A weak September jobs report is likely to keep the Federal Reserve on hold later this month, even as Fed officials are still likely to view the job market as balanced at full employment and keep their focus squarely on bringing inflation down.
, falling far short of the 88,000 expected and down from a revised 133,000 in August. The unemployment rate edged up to 4.2% from 4.1%. September's report is"going to put the Fed definitely on hold for October," Mohamed El-Erian, professor at the University of Pennsylvania's Wharton School and former CEO of PIMCO, told Yahoo Finance. It's the unemployment rate that Fed officials are most focused on, along with average monthly job growth numbers.
The unemployment rate remains low, despite ticking up last month, while average monthly job creation sits at 45,000 over the past year. , ahead of the jobs report release. Both struck a more cautious tone than several of their colleagues, acknowledging that inflation has remained too high, but that the central bank should take time to watch and assess whether inflation will come down in a timely manner.
"My colleagues and I will need to come to our own judgment, which may take more time," Jefferson said in a speech Thursday. "I will continue to assess whether underlying trends suggest that inflation will return to target with sufficient speed. With more data in hand, such trends may lend themselves to better discernment, as may the appropriate stance of monetary policy.
"Jefferson and Williams are closest to Fed Chairman Kevin Warsh and form the central bank's troika of leadership. Williams sees one more rate hike"late this year" to support what he calls a"timelier" return of inflation to the Fed's 2% target. Late this year, to many, implies a hike timed for December rather than in October, when their next meeting takes place.
"It's been too high for too long, and the data that we see there are some promising pieces, but there's some parts that aren't as promising," Boston Fed president Susan Collins said on a panel Thursday at the Investing in Rural America Conference, hosted by the Richmond Fed. "Arguably, we just haven't fulfilled our promise on the inflation side," Kansas City Fed president Jeff Schmid said Thursday. "As I think Chairman Warsh says, we have work to do.
"a few weeks ago for the first time in more than three years, and the median expectation of the interest rate-setting committee, excluding Warsh, is for "This data won't shift the broader decision-making calculus for the Fed as inflation remains the supreme concern," said Chris Hodge, chief economist for Natixis. "But with wages lower and the jobs picture a bit less rosy, it certainly decreases the urgency to hike in October .
"We continue to think that this cycle will ultimately have fewer hikes than currently being priced by the market and predict only one more rate increase. " Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance, she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X
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